By CHRIS GRYGIEL, SEATTLEPI.COM STAFF

Updated 4:27 pm, Monday, September 26, 2011

Staring at increasing deficits in the tens of millions of dollars for the next several years, Mayor Mike McGinn on Monday released his 2012 spending plan, one which eliminates more than 100 positions, reduces funding for police and neighborhoods and combines two previously independent departments.

The general fund budget, which pays for the day-to-day operations of City government, is $910 million. That's $12 million less than the budget for this year. It's the fourth consecutive year of general fund budget reductions. For next year, budget officials say a $18 million deficit must be dealt with. For 2013, that's expected to be $32.8 million and 2014, the figure is projected at $39.2 million.

In the weeks before Monday's formal unveiling, McGinn released several details of his 2012 proposal, which will now be scrutinized by the City Council. Councilmembers, who will pass a final plan in November, have already indicated they're leery of the mayor's idea to reduce the Seattle Police Budget by $2.4 million by keeping 26 sworn officer positions vacant.

Overall, McGinn's plan would get rid of 112 full-time equivalent positions. Of those, 96 are currently filled, the mayor said. McGinn's budget would eliminate 82.4 of those jobs and reduce the hours of 13.4. Seventeen percent of the reductions would be from senior-level positions, the mayor's budget office says, noting that such jobs make up just under 9 percent of the total City work force.

The departments seeing the biggest reductions in FTEs are:

Department of Transportation: 54.5

Housing: 38.5

Neighborhoods: 34.5

Parks and Recreation: 26.2

McGinn would merge the Housing and Economic Development department.

McGinn would merge the Housing and Economic Development department.

McGinn and Council at odds

In addition to police staffing, another potential flashpoint between McGinn and the Council will be over the size of the City's reserve fund. Right now, it's at $11.2 million, down from $30.2 million three years ago. McGinn wants to add $1.95 million to the Rainy Day Fund next year, saying it's prudent in these tough economic times and important to do so in order to maintain the City's top credit rating.

As for police staffing, McGinn has said the SPD is exceeding public safety expectations in areas like 911 response time for the most urgent calls and said the number of officers assigned to patrol fuctions – 545 – is near the highest it has ever been. Going into 2012, McGinn's budget would aim to keep a total force of 1,301, and the department would be allowed to hire to keep staffing at that level should it be needed. The mayor said there are other areas that are key to public safety, too, like youth violence prevention programs, and money saved from the SPD can help pay for those.

As the effects of the Great Recession linger, Budget Director Beth Goldberg said Seattle's economy has yet to fully recover. Before the downturn, between 2005-7, revenues from property, sales, business and utility taxes grew at an annual rate of about 7.5 percent. Between 2008-10, that fell to 0.3 percent.

When inflation is factored in the City's general fund tax revenues are $27 million below the 2007 peak, Goldberg said.

Last year the City Council used money from Seattle's history to help patch up the budget, which at the time was $67 million in the red.

The Council used $11.6 million in new monies to mitigate cuts McGinn had proposed 12 months ago. The bulk of that money came from an $8.5 million loan to the city from the Museum of History and Industry, flush with cash following the sale of its Montlake building to the state as part of the State Route 520 bridge replacement.

While still having to cut about 300 positions city-wide and make other reductions, the Council was able to do things like add $2.2 million to the mayor's original budget for transportation projects, like services for pedestrians and bicyclists.

However the economic downturn caused the City to tweak this year's spending plan. In June, the McGinn administration said it had to trim $8.7 million from the budget. The cuts were due to lower than expected tax revenues and anticipated reductions in state and federal aid. Among the changes were a $1.9 million cut to the Parks Department, $707,000 in reductions to the Fire Department, which resulted in fewer recruiting efforts and less equipment replacement and $660,000 from Human Services.